Publications

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  • A Quarterly Econometric Model for Short-Term Forecasting of the U.S. Dairy Industry

    TB-1932, January 05, 2012

    This research evaluates the econometric approaches employed by USDA's Economic Research Service (ERS) to contribute to the dairy sector forecasts published in the monthly World Agricultural Supply and Demand Estimates (WASDE) report. To generate the estimates, a quarterly model of the U.S. dairy industry is specified using data for fourth-quarter 1998 (Q4/1998) to first quarter 2009 (Q1/2009), and it is estimated and validated employing data for Q2/2009 to Q1/2010. Different forecasts are generated using a variety of single equation and system methods, and which are then evaluated in terms of forecast precision or predicting turning points in the data. Different approaches, however, more effectively forecast different variables. Vector autoregression with exogenous variables outperforms structural regression models when forecasting prices, but single and system estimations of structural models are superior to time series models when forecasting some items in farm supply and commodity balance sheets.

  • Agriculture in the Trans-Pacific Partnership

    ERR-176, October 28, 2014

    The proposed Trans-Pacific Partnership is expected to increase the value of intraregional agricultural trade by about 6 percent in 2025, and increase U.S. agricultural exports to the region by 5 percent, compared with the baseline.

  • Americans' Dairy Consumption Below Recommendations

    Amber Waves, November 01, 2007

    Americans are consuming more dairy products than in 1970, but not enough to meet the daily recommendations for milk and milk products. The 2005 Dietary Guidelines for Americans and the supporting MyPyramid Food Guidance System recommend that Americans consume 2-3 cups of milk and milk products daily, depending on their age, gender, and level of physical activity. ERS's per capita food availability data show that Americans on average consumed 1.8 cups of dairy products per person per day in 2005.

  • An Analysis of U.S. Household Dairy Demand

    TB-1928, December 13, 2010

    This report examines retail purchase data for 12 dairy products and margarine from the Nielsen 2007 Homescan retail data. Selected demographic and socioeconomic variables included in the Nielsen data are analyzed for their effects on aggregate demand and expenditure elasticities for the selected products. A censored demand system is used to derive the demand elasticities. The resulting estimates revealed that the magnitudes of 10 of the 13 own-price elasticities are greater than 1; substitute relationships are found among most dairy categories; expenditure elasticities are 1 or greater for 7 of the 13 products; and demographic and socioeconomic variables are statistically significant contributors to dairy demand.

  • Analyses of Generic Dairy Advertising, 1984-97

    TB-1873, February 01, 1999

    Generic advertising raised fluid milk sales about 6.0 percent, or 18.1 billion pounds, between September 1984 and September 1997. Sales of cheese rose by about 6.8 million pounds (milk equivalent) in the same period because of increased generic advertising. An assessment of 15 cents per hundredweight of milk sold commercially, mandated by the Dairy and Tobacco Adjustment Act of 1983, funded the advertising. Activities of the National Fluid Milk Processor Promotion Board also contributed to increased milk sales over the past year. Gross returns to dairy farmers between September 1984 and September 1997 were estimated to increase by $3.44 for each dollar spent on generic advertising. This report presents the results of econometric demand models that examined the effect of advertising and other facts on milk and cheese sales.

  • Animal Products Markets in 2005 and Forecasts for 2006

    LDPM-14601, September 08, 2006

    Uncertainty continues to shape the forecasts for animal products markets in 2006. Potential and actual animal disease outbreaks, consumer sensitivities, volatile exchange rates, and growing competition from producers in other countries cloud U.S. trade prospects for major meats. Loss of U.S. trade market share, partly caused by disease outbreaks and related trade restrictions that have affected animal product exports since 2003, compounds the problem. The outlook for U.S. meat, poultry, and dairy markets in 2006 depends on how well domestic production adjusts to changes in input costs, the effect of exchange rates on trade, the continuing effects of disease and trade restrictions on exports, and the increasing competitiveness of emerging animal products exporters.

  • Carbon Prices and the Adoption of Methane Digesters on Dairy and Hog Farms

    EB-16, February 07, 2011

    Biogas recovery systems collect methane from manure and burn it to generate electricity or heat. Burning methane reduces its global warming potential, thereby reducing greenhouse gas (GHG) emissions. Climate change mitigation policies that effectively put a price on GHG emissions could allow livestock producers to "sell" these reductions to other greenhouse gas emitters who face emissions caps or who voluntarily wish to offset their own emissions. Depending on the direction and scope of future climate change legislation, income from carbon off set sales could make methane digesters profitable for many livestock producers. By modeling the main determinants of producers' decisions to adopt biogas recovery systems, we illustrate how the price of carbon influences this decision and the potential supply of carbon offsets from the livestock sector.

  • Changes in Herd Composition a Key to Indian Dairy Production

    Amber Waves, June 05, 2017

    India is the world’s largest producer and consumer of milk. Growth in milk supply and demand has been robust, but projections indicate that production targets will be difficult to reach without stronger gains in productivity.

  • Changes in Retail Organic Price Premiums from 2004 to 2010

    ERR-209, May 24, 2016

    Of 17 organic food products ERS analyzed, most retail price premiums fluctuated between 2004 and 2010, neither increasing nor decreasing steadily. Only three products-fresh spinach, canned beans, and coffee-showed steady premium decreases.

  • Changes in U.S. Dairy Commercial Exports and Domestic Commercial Disappearance

    Amber Waves, February 02, 2015

    Traditionally, the U.S. dairy industry was driven by the domestic market. Since about 2004, U.S. dairy exports have grown substantially, primarily for products with high skim milk solids content, such as nonfat dry milk and skim milk powder. Domestic consumption has had greater growth for products with relatively high milk-fat content, such as cheese.

  • Changing Structure, Financial Risks, and Government Policy for the U.S. Dairy Industry

    ERR-205, March 09, 2016

    Dairy farmers faced a severe financial setback in 2009 as milk prices fell sharply and feed prices remained high, while the industry has undergone structural change. Recent legislation addresses the volatility in milk and feed prices.

  • Characteristics and Production Costs of U.S. Dairy Operations

    SB-974-6, February 25, 2004

    Total costs of producing milk in 2000 ranged from an average of $11.58 per hundredweight (cwt) of milk sold in the Fruitful Rim-West region to $18.23 per cwt in the Eastern Uplands. Milk producers in the West had a significant cost advantage over producers in other regions in 2000 because their operations were much larger. Operations with 500 or more milk cows had significantly lower total operating and ownership costs, indicative of the economies of size experienced by larger operations. Also, differences in animal performance, feed efficiency, and labor efficiency were critical in determining whether producers were in the low- or high-cost group for producing milk. These findings were based on the 2000 Agricultural Resource Management Survey (ARMS), the most recent national survey of milk producers.

  • Characteristics, Costs, and Issues for Organic Dairy Farming

    ERR-82, November 02, 2009

    ERS addresses size, regional differences, and pasture use in organic milk production. Economic forces have pressured organic dairies to operate more like their conventional counterparts and take advantage of economies of size.

  • China's Dairy Supply and Demand

    LDPM-282-01, December 15, 2017

    The future of China's dairy supply depends on increased domestic production and greater trade for dairy. China's growing dairy production provides opportunities for U.S exports of alfalfa and other inputs.

  • Climate Change Policy and the Adoption of Methane Digesters on Livestock Operations

    ERR-111, February 07, 2011

    Methane digesters-biogas recovery systems that use methane from manure to generate electricity-have not been widely adopted in the United States because costs have exceeded benefits to operators. Burning methane in a digester reduces greenhouse gas emissions from manure management. A policy or program that pays producers for these emission reductions-through a carbon offset market or directly with payments-could increase the number of livestock producers who would profit from adopting a methane digester. We developed an economic model that illustrates how dairy and hog operation size, location, and manure management methods, along with electricity and carbon prices, could influence methane digester profits. The model shows that a relatively moderate increase in the price of carbon could induce significantly more dairy and hog operations, particularly large ones, to adopt a methane digester, thereby substantially lowering emissions of greenhouse gases.

  • Climate Change, Heat Stress, and U.S. Dairy Production

    ERR-175, September 30, 2014

    In 2010, heat stress lowered annual milk production for the average dairy by about $39,000, or $1.2 billion for the sector. In 2030, additional heat stress from climate change may lower milk production by an estimated 0.6 to 1.35 percent.

  • Commodity Program Provisions Under the Food and Agriculture Act of 1977

    AER-389, October 01, 1997

    Commodity program provisions of the Food and Agriculture Act of 1977 are summarized. Price support, loan level, disaster payment, program acreage, and other provisions of the legislation are discussed for wheat and feed grains, cotton, rice, peanuts, soybeans, sugar, dairy products, and wool and mohair. Miscellaneous provisions and those applying to grain reserves and to the beekeeper indemnity program are also summarized.

  • Confined Livestock Operations Account For a Majority of the Chesapeake Bay Area’s Farmland With Applied Manure

    Amber Waves, April 07, 2014

    Excessive flows of nutrients into the Chesapeake Bay can damage the bay’s environment, yielding coastal dead zones, fish kills, and impaired drinking water supplies. Agriculture is a main contributor to nutrient run-off, responsible for 38 percent of the bay’s nitrogen and 45 percent of phosphorus loadings.

  • Consumer-Level Food Loss Estimates and Their Use in the ERS Loss-Adjusted Food Availability Data

    TB-1927, January 03, 2011

    The Food Availability (per capita) Data System developed by USDA's Economic Research Service tracks annual food and nutrient availability for many commodities. The Food Availability data series in this system overstates actual consumption, so ERS has included an additional series, the Loss-Adjusted Food Availability data, to adjust the Food Availability data for nonedible food parts and food losses, including losses from farm to retail, at retail, and at the consumer level. In this report, we propose new consumer-level loss estimates for "cooking loss and uneaten food" of the edible share to replace those currently used in the Loss-Adjusted Food Availability data and propose their adoption for the entire data span (1970 to the most recent year in the series). The proposed loss percentages are calculated by subtracting food consumption estimates from food purchase or availability estimates for each food. These calculations are adjusted with information from an expert panel experienced in analyzing food consumption data. In general, the proposed food loss estimates for individual foods indicate substantial differences from the currently used estimates. Although some estimates indicate smaller loss percentages than the currently used estimates, many are larger. Overall, if the proposed loss estimates are used in the ERS loss-adjusted series, the average American would consume 17.3 pounds less each year, or 41.9 fewer calories per day, than suggested by the currently used loss estimates.

  • Consumers Show Strong Brand Loyalty in Cheese Purchases

    Amber Waves, June 01, 2009

    ERS research reveals that strong brand loyalty for specific types of cheese among U.S. consumers. This brand loyalty even overrides response to changing prices. But brand loyalty does appear to decline over time.